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The Many Faces of Employee Ownership

The most common transition to employee ownership is done through an Employee Stock Ownership Plan, or ESOP — a kind of retirement plan that allocates shares over time to each employee and holds the shares in a trust until the worker leaves the company or retires, at which time the employer must buy the shares back at fair market value. New Belgium Brewing Co. and the Publix super market chain are among the roughly 7,000 ESOPs that benefit more than 13 million U.S. employees.

ESOPs only address the ownership side of the equation — they do not guarantee employees control over their company’s operations. The vast majority of ESOPs are run with a traditional, top-down structure.

Worker-owned co-ops, such as Real Pickles, are usually governed by employees, based on the principle of one worker, one vote. They are far less common than ESOPs: An estimated 350 U.S. worker-owned cooperatives employ about 5,000 people, according to the U.S. Federation of Worker Cooperatives. This is a small fraction of the 29,000 member-owned co-ops in the U.S., including consumer-owned co-ops, like credit unions, and producer-owned co-ops, such as Organic Valley and the national network of farm co-ops.